Keith Rankin: "Intellectuals" as an Academic Sub-Species

On the Role of 'Intellectuals' as an Academic
Sub-Species

On the 3rd of February this year,
Chris Barton of the New Zealand Herald published an article
called "Who is speaking out on today's big
issues?" He included a non-exhaustive list of New
Zealanders, who by virtue of their expertise and willingness
to engage on public issues, might qualify for the rubric
'public intellectual'. He was kind enough to place my name
on the list.

Barton writes of a "rare, routinely derided
breed – the public intellectual or expert analyst applying
their skills more widely [than their academic specialties]".
Indeed New Zealand is commonly criticised for its
anti-intellectualism, and there's no doubt that it's
particularly hard to induce a public debate in New Zealand
about underlying philosophical principles relating to
economic and financial issues such as taxation, equity,
employment, enjoyment, credit, investment, productivity,
sustainability, inflation, money and others. In the main,
these are seen as technical issues of dry scholarship;
issues for geeky experts who should be neither seen nor
heard by the public at large.

Indeed New Zealand
government policy has been, for a quarter-century or more,
to build academic institutions that increasingly promote
narrow scholarship at the expense of the intellectualism
that Barton writes about.

The crafts of the scholar and
the intellectual are not mutually exclusive; far from it. An
intellectual should never be unscholarly, should not have an
agenda (but may have a passion or two), and should respect
the scientific principle of falsification through
observation. [The principle of falsification is most
associated with Karl Popper, an intellectual of global
significance, who wrote some of his philosophical works in
Christchurch.]

Nevertheless, most scholars are not
intellectuals, and some intellectuals would not describe
themselves as scholars. Intellectuals need not be from an
academic background, although almost all will have been
exposed to academia. Paul Krugman, the renowned American
economist, was a scholar who became an intellectual. He no
longer does the career-building 'hard yards' of an academic
researcher. Rather he engages his profession and the wider
public in ways - through popular books, his New York
Times column, and literary reviews – that are
discomforting to many.

Intellectuals are consumers of
information – scholarly and otherwise. Intellectuals
present, unpack and criticise arguments; they tell stories,
often speculative stories; they ask questions, different
questions; they address issues, including contentious issues
that scholars and policymakers may avoid; they make lateral
connections between different bodies of knowledge; they
converse with 'the public', not just their peers. They trade
in ideas. An intellectual, in engaging a wider audience,
supplies broader but less footnoted outputs than a scholar;
lucid essays rather than academic prose. The best
intellectuals suggest solutions to the problems they
address.

Intellectuals have historical awareness; they can
relate contemporary concerns to events and concerns of the
past. And they can see some areas – some, not all – in
which the future cannot be like the past. For example,
intellectuals interested in the post-2008 economic crisis
will look to earlier crises, our responses to them, and
their eventual resolutions – crises such as the depression
of the 1930s and the panic of 1907 – looking for points of
similarity and points of difference. And they would look to
differences in future circumstances – eg environmental
constraints – which might require different resolutions to
the types of problem that have occurred in the
past.

Economics

In economics, there is
a 'paradigm' that most career economists follow. It is
called neoclassical economics. It is based on the idea that,
if everything is priced correctly, relative to everything
else, there will be a general equilibrium outcome that
represents the best of all possible worlds; or, in Platonic
terms, an ideal state that may not be achievable but which
we can always get closer to. In this ideal market state,
there is no unemployment, no inflation; there are no
perpetuating financial imbalances. Further this state is
most closely achieved through minimal government. Thus most
problems end up being blamed on policy mistakes by
governments, or quasi-government authorities such as central
banks

Keynes, in his General Theory published in 1936,
observed that neoclassical economic theory had an elegant
superstructure but poor foundations. Economists –
scholars, policy analysts and bank economists – continue
to work largely within this paradigm. Scholars add to the
superstructure, exponentially as their careers depend on the
'publish or perish' imperative. Intellectuals, better
equipped to address the foundational premises of the
discipline, are crowded out by the publication sausage
machine.

Whenever there is a real-world economic problem,
the neoclassical paradigm leads economists to the conclusion
that there must be distortions within the price system. Thus
unemployment, according to the paradigm, is caused by wages
(the price of labour) being too high. Scholarly debates
within the broad neoclassical paradigm are more likely to be
about why wages are too high in a recession, not
whether they are too high.

It is intellectuals,
with cross-discipline and cross-paradigm vision, who can
offer alternative explanations and solutions. Intellectuals,
much more than scholars with their narrow fields of vision,
can help us to break the impasses that prevent us from
asking the right questions, let alone finding answers to the
seemingly intractable socio-economic problems that we
face.

Darwinian selection and economic
truth

The most important scientific principle of
modernity is that of Darwinian natural selection, commonly
known as 'the survival of the fittest', but better
understood as 'the non-selection of those who or which do
not meet some survival criteria'. The principle is
essentially a tautology: 'what survives, survives'.
Scholarly paradigms such as neoclassical economics survive
brilliantly in Darwinian terms.

When it comes to natural
science, the criterion of unfitness is falsification.
Hypotheses that are shown by factual evidence to be false
– through observations inconsistent with the hypothesis,
or consistently useless predictions – are discarded, and
other hypotheses are formulated.

In human society,
however, there are at least two other Darwinian survival
criteria: the criterion of profit and the criterion of
career. According to the criterion of profit, an item
(including an idea) is rejected if too few people buy it,
and is successful if people with purchasing power do buy it.
(Under the principle of consumer sovereignty, the consumers,
whether of goods or ideas, are always correct. Survival is
determined by sales.) Market selection is determined by
perceived self-interest; falsification is equivalent to the
absence of profit. If the principle that unemployment is
caused by excessive wages is bought by the people in society
with the most buying power, then that principle survives and
becomes an accepted truth.

Related to the criterion of
profit is the criterion of career. If one possible truth
leads a scholar or analyst into a more clearly defined
career path – in economics the opportunity to do policy
analysis and consultancy work is important – then that
'orthodox' truth is selected over alternative 'heterodox'
truths, regardless of how well the competing truths explain
or predict real-world events.

In economics, it's the
wealthiest five percent (or thereabouts) who are the
principal buyers of economic truth. According to the
neoclassical paradigm, a rise in the money supply will
reduce interest rates, and lower interest rates are widely
seen to be growth-promoting. However, because low interest
rates are not generally favoured by the principal buyers of
economic truth, a feedback theory of inflation expectations
was developed (and bought). This theory tells us that
induced changes in the demand for money will mean that an
increased money supply leads to inflation expectations and
therefore higher (rather than lower) interest rates, and may
therefore be growth-inhibiting. Thus, the buyers of economic
truth tend to favour restrictive monetary policies.

On
another matter, a more obvious feedback mechanism is not
bought by the most influential buyers in the marketplace for
truth. If wages are reduced in a period of high
unemployment, the feedback effect is a reduction in the
purchases of goods and services, and even higher
unemployment. (We see this clearly in southern Europe at
present.) However, those whose purchases of ideas determine
which ideas should be regarded as true believe in lower
wages (lower costs to their businesses) as well as higher
interest rates (higher 'investment' income to them).

So
one mechanism which 'supply' conditions induce 'demand'
changes is rejected (relating to wages), while another
(relating to money) is accepted. This selection process
takes place not only on the basis of factual evidence, but
also in accordance with the preferences of our most
influential buyers of
truths.

Conclusion

Scholars are miners
– suppliers – of truths. But they supply truths to the
market. Thus they mine some seams very intensively, while
neglecting other seams; choosing which seams to mine in
accordance with Darwin's principle of selection. Thus
scholars will tend to favour the seams that yield the
greatest career rewards, which tend to be the seams least
threatening to the purchasers of truths. It is the role of
intellectuals, most of whom are also practising scholars, to
shine some light on those less-mined truths; truths that may
be inconvenient for some.

Keith Rankin has taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith lives with his family in Glen Eden, Auckland.

Contact Keith Rankin

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